Growth Hormone Controversy Shrinks

Higher Milk Production Hasn't Hurt Profits

But the nation isn't floating in it despite fast-growing usage of a production-boosting hormone, indicating that the economic warnings and safety concerns of several years ago may be unfounded.

"Cows are our livelihood," said Linnea Kooistra, who with her husband, Joel, operates one of McHenry County's largest dairy farms, near Woodstock. "We are going to take the best care possible of our herd."

They are among the 13,000 milk producers who use recombinant bovine somatotropin. or BST, a synthetic version of a naturally occurring bovine growth hormone. The product can increase milk output per cow from 5 to 15 pounds a day, or an average of about 10 percent, according to Monsanto Co., which markets BST under the name Posilac.

Dairy country has accepted, if reluctantly, the biotechnology that was once viewed as a threat to the financial health of small producers because it was feared the resulting higher production would bring lower prices.

But today, milk prices received by farmers are at record levels and increases in milk production may be, if anything, below trend. Consumer demand for dairy products pushed farm gate prices from a low of $10.88 per hundred pounds in May to $16.84 (about $1.45 a gallon) in November, and undoubtedly above $17 for December.

Fears of an ocean of milk and mountains of butter and cheese, dreaded by dairy farmers when Posilac was approved five years ago, have evaporated as usage increased.

Controversy over health issues has died down also. Self-described consumer advocates on occasion still pitch unproven charges that are dismissed by most relevant scientists and government regulators. And a few dairies have established niche businesses that cater to the biotech-wary, promoting their products as free of the synthetic stuff.

Production has increased for the Kooistras' 280-cow herd, but Joel Kooistra said that an improved mixed feed ration and comfortable open-air facilities for the cows get much of the credit.

Still, he said, "Posilac has become almost a necessity because it extends productive cow life and keeps milk production up when the cow is not pregnant." Linnea Kooistra calculates that the average gain for cows on Posilac, which they have used since the first day it was allowed--Feb. 4, 1994--is about 12 pounds per cow per day.

Nationally, the average yearly production per cow will be up for 1998, but only 1 percent to 1.5 percent, to around 17,100 pounds, according to dairy specialist James Miller of the Economic Research Service of the U.S. Department of Agriculture. More normal gains range from 1.8 percent to 2 percent, he said.

He said that with milk prices high and feed costs low, "Dairy farmers have had the best incentives to expand since World War II," but production figures don't show it.

"Monsanto has been coy for the last couple of years about the numbers it discloses on BST usage," Miller said. "Even so, there appears to be a sizable discrepancy between the company's statements and the milk production data reported by the National Agriculture Statistics Service."

Miller granted that USDA statistics could be off base and that the estimated number of milk cows--around 9 million--could be too high. The department later this month will release an actual count, taken every five years.

"Nothing I have seen would imply that there has been a major problem with NASS numbers," Miller said.

But, he noted, production was cut by weather and crops. Last spring, excessive rain in California caused mud problems that stressed the cows and lowered output in the top milk-producing state. Even more important, Miller said, was spotty forage quality in northern dairy areas.

While agreeing that the company had been coy with numbers previously, Monsanto spokesman Gary Barton asserted that Posilac sales wouldn't be increasing nor would the company be spending millions of dollars for a new production plant in Augusta, Ga., if it were ineffective.

Monsanto claims that about 30 percent of the nation's dairy cows, or around 2.7 million, are in herds supplemented with Posilac. At any one time, because of lactation cycles, probably only 65 out of 100 cows designated to be on BST would actually be using it, Barton said. Posilac is administered by injection twice a month.

The company says that about 300 dairy producers a month begin using the product. Barton said sales rose 30 percent annually the last two years after jumping 45 percent in 1996.

Total sales passed 100 million doses in 1998, which means, at $5.80 a dose, Monsanto's Posilac revenues have reached $600 million. The St. Louis-based company has the market to itself, because the Food and Drug Administration has approved no competitor's BST product.

Barton said that a farmer with a herd of 100 cows would show an extra $15,000 annual profit above the cost of Posilac and the cost of increased feed the cows eat.